Retail tech key as Sainsbury's business changes fundamentally

Sainsbury’s has paid tribute to the strength and flexibility of its digital and technology platforms during the coronavirus outbreak.

The grocery giant said today that total first quarter sales increased by 8.5% as it beat expectations despite the pandemic. Although it was forecasting a £500 million profit hit due to crisis-related costs, stronger grocery sales and business rates relief would offset the shortfall, it added.

“Our digital performance has been particularly strong, with sales more than doubling,” the retailer said in a statement.

“Our ability to quickly respond to customers choosing to buy groceries, general merchandise and clothing online reflects the strength and flexibility of the digital and technology platforms we have built.”

“Our business has changed fundamentally from four months ago,” the statement added. This includes online grocery sales growing by 87% year-on-year and orders from around 370,000 to over 650,000 per week. Nearly 50% of new groceries online customers were new Sainsbury’s customers.

SmartShop, which lets customers scan their own groceries and use a separate checkout, reached 37% of sales on average and exceeded 50% in some stores. Sainsbury’s also rolled out its one-hour grocery delivery service Chop Chop beyond London and it is now in 15 cities.

While all 573 Argos standalone stores were closed for the majority of the quarter, customers could shop with the brand online for home delivery and Click and Collect from Sainsbury’s stores. As a result, Argos performed well, growing 10.7%, with home delivery sales up 78% and Click and Collect sales up 53%.

Lockdown measures started to ease towards the end of the quarter and 174 stores were reopened across the UK and Ireland in phase one and 100 more will return to action in phase two in July.